[QUOTE=Jophiel]
This Associated Press article from 2004 indicates that the vast majority of federally leased lands held by energy companies haven’t even had a permit filed for exploration yet, much less been explored or exploited. Is there a more reasoned response for this than “WTF??” I’d assume that there must have been geological features to the land which made it seem worth leasing if the companies decided to actually lease it.
Bolding mine for emphasis:Shouldn’t there be a push to explore the lands already legally set aside for this purpose?
[/QUOTE]
Are those premits for exploratory drilling of another form of exploration?
Exploring does not imply drilling. First stages are gravimetric, electromagnetic and seismic surveys and occasionally looking for bacteria at surface that eat hydrocarbons not contained within a trap. These will identify structures that may trap oil, combined with some (ok quite a lot) of geological knowledge about the hydrocarbon generations system in the basin. They may have leased the land with intention to explore through seismic first and are awaiting results prior to drilling.
Another very good reason right now for not going drilling or shooting seismic on land is that the rates are very high and the equipment and crews are not available. (Small anecdote not from the US land environment, but one of our concessions has been waiting almost one year from lease to before we will actually shoot seismic, due mostly to sesimic crew availability. We probably wont get a rig for another year on top of that). The low equipment availability is partially due to the boom/bust cycle of the oil patch. In the US several of the big players in the seismic field pulled out a few years back due to horribly low pricing and over capacity. The land drilling rig fleet is also at capacity, so if you have a rig, it will be drilling up a prooved field rather than an exploration block. The same goes for the oil company people, current producing fields are a priority, drilling engineers and geologists are focused on those (not exclusively, but it is a priority)
So why push for the offshore. Well the companies engaged on land leases in the us tend (again, not exclusivly) to be the smaller operators who can make the , typically , smaller fields with lower production rates, economic. These guys are subject to the issues I outlined above.
The offshore leases tend to be the focus of the larger companies (Exxon, Shell and the big independents like Devon Anadarko etc). They are rig constrained, but have the budgets for a longer outlook and can assign people and resources to expensive exploration projects, and dont mind signing 5 year contracts for a rig costing 450,000 a day an dblowing 120 million on an exploration well. The reason, deep water offshore wells tend to be prolifc producers of high gravity crude, that is to say, big payback if you pull it off.
So basicaly the economics for the big guys for the land leases are not as attractive as offshore, the land eases tend to be less prolific and the land market is resource constrained.
That said, I see no reason for congress not to push for greater use of the land leases. Government pushes one way, the operators another, each wit valid points, we will hopefuly end up with a reasonable compramise somewhere.
